Category: Real Estate

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Michigan Now Regulates Deed Solicitation

As of July 11, 2016, soliciting a fee for providing a copy of deed is a now regulated activity in the State of Michigan and carries civil penalties for noncompliance. The new law is known as the “Solicitation of Deeds Act. [1] A previous article provides background into what has been a contentious issue with several register of deeds offices in Michigan. Whatever the opinion on the merits of private business versus county office or public protection, this new law now severely limits what can be done in the deed solicitation business and puts significant obstacles in front of running such a business.

nosoliciting

The 2016 law sets out the following requirements for a person soliciting a fee for providing a copy of a deed even if the copy itself is free, and these requirements are:

  1. The solicitation must state on the top of the document used for the solicitation, in at least 24-point type, all of the following:
    • That the solicitation is not from a public body.
    • That no action is legally required from the person being solicited.
    • The amount of the fee for obtaining a copy of the deed from the public body that has custody of the record.
    • The information necessary to reach the custodial public body.
    • The name and physical address of the person soliciting the fee
  2. The document used as the solicitation shall not be a form or use deadline dates so as to appear issued from a public body or that appears to impose a legal duty on the person being solicited.
  3. A person soliciting a fee for providing a copy of the sees shall not charge a fee 4 times more than the statutory fee charged by the custodial public body.
  4. A person soliciting the fee shall furnish a copy of the solicitation to be use to the office of the register of deeds in each county where the solicitation will be distributed. [2]

Certain business are specifically exempted from the Act. These are title insurance companies, mortgage companies including brokers and lenders, and real estate brokers, and real estate brokers and salespeople. [3] Curiously omitted are attorneys. However , the definition of “solicitation” in the statute is “to advertise or market to a person with whom the solicitor has no preexisting business relationship”. Therefore, an attorney pulling a deed for a client and charging that client for the time or service is not within the purview of the Act.

Penalties for noncompliance are as follows: for a first time offense, $100 per solicitation/document in violation of the Act; and for a subsequent offense, $200.00 per solicitation/document. [4]  Civil fines collected go to support public libraries. [5] The Act authorizes Attorney general action against violators. [6] There appears to be no private cause of action under the statute.

The new law should have a chilling effect on the private business of deed solicitation in Michigan. If the goal is to protect elderly or unsophisticated persons who tend to be disproportionately affected by misleading solicitations, this appears to be in the public interest. Otherwise, the merits of the law are less clear.  GJR

Notes:

  1. MCL 445.1031 et seq.
  2. MCL445.1033.
  3. MCL 445.1034.
  4. MCL 445.1035.
  5. MCL 445.1035.
  6. Id., MCL 445.1036.
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Register of Deeds Recording Fees Increasing October 1, 2016

Effective October 1, 2016, pursuant to Public Act 224 of 2016 which amended Public Act 236 of 1961, the fee for recording a document with any county Register of Deeds will increase from the current fee of $14.00 plus $3.00 for each additional page to $30.00 flat fee (inclusive of Michigan Remonumentation and Register of Deeds Automation fees) regardless of the number of pages in the document. [1]  There is one exception: if the document to be recorded assigns or discharges more than one instrument, there is an additional $3.00 fee for each additional instrument assigned or discharged. [2]  Also to certify a recorded document is now $5.00; however the fee for copies of documents remain at $1.00 per page. [3] 

For larger documents (six pages or more, exclusive of assignments and discharges) there is certainly a cost savings versus the previous fee schedule. However, for the vast majority of document recordings, especially deeds where most are only one to a few pages, the cost of doing business has substantially increased, basically doubled. As with many of the court fee increases over the last year, this change appears to be a revenue generation measure for the State of Michigan, to make up for fiscal losses in other areas. GJR

Notes

  1. MCL 600.2567(1)(a)
  2. MCL 600.2567(1)(b)
  3. MCL 600.2567(1)(c), (d)
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Document Retrieval Services: Scam or Convenience?

You receive an official-looking and urgent letter in the mail stating that you need to obtain a certified copy of the deed to your house in order to protect yourself and that the company sending the letter can help. This needs to be done immediately, so drop what you are doing and send in your check. Right?

Some Register of Deeds Offices Cry Foul

A number of local register of deeds offices have posted online alerts regarding solicitations of so-called document retrieval service companies, claiming that they are alarming residents into paying excessive fees for something they the residents can do themselves at the local register of deeds office. Some of the alerts include:

A copy of one of the contentious Michigan Document Retrieval Service letters reads:mdrs_letter

The Cost of Doing Business

Just because the document retrieval service is charging more money that your local register of deeds charges does not mean that it is a scam.  If the company provides the service it claims and it upfront about the costs, the extra money charged equates to the cost of doing business as an understood convenience to the consumer.  It is likely inexpensive to go directly to or call your local register of deeds to obtain copies yourself, unless you do not live in the area. For example instead of preparing dinner or walking the dog yourself, you can hire and pay someone else to do it. The consumer weights the options, balancing time vs. money.

But Beware Untruthful Representations

The grey area in terms of scam might be the pressure-filled language and print, or other urgent representations that is often used in these letters to move the consumer to sign up for the service.These companies should be careful not to represent things that are not true; or better yet, to advise the resident of their and option to be able go directly to their local register of deeds office instead.

For example, the Michigan Document Retrieval Service letter clearly uses urgent language such as “Your rights may be in jeopardy…” and “You should obtain one immediately…” It further goes to state that you should have a certified copy of your deed on hand; where, while certified copies are necessary for certain transactions, they are not necessary for research or verification purposes as to title. Also, just having a copy of the deed, while it allows one to verify that information on the deed is correct, does not allow one to verify “free and clear title”, that the property is “free from all liens and encumbrances”, that title is “defendable in court against all legal claims”, or to “verify that property taxes are entered in your name”, as the above document indicates.  This is where the potential for misrepresentation, intentional or otherwise, creeps in.

There has been nothing to suggest that these companies do not deliver on the service that they promise. Rather, complaints revolve around the sales tactics but even more so the price. Scam? Probably not. Wise? It’s the buyer’s choice, and buyer should make an educated decision, or beware. GJR